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Are    We    Ready    For 
Industrial    Co-operation? 


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OF 


CALIFO^l^^^i. 


An  Address  before 
The  State  Convention  of  the  Indiana  Y    M.  C.  A., 
Hammond,  Ind. ,  November  22,  l9i2. 


By 

FAIRFAX  HARRISON 
President,  Chicago,  Indianapolis  &  Louisville  Railway  Co. 


-','  I 


^^ 


S>  ^^"^ 


ARE  WE  READY  FOR  INDUSTRIAL  CO-OPERATION? 


I.    The  Industrial  Conflict.  ~ 

Conflict  seems  to  be  necessary  to  the  human  animal  with  red 
blood  in  his  veins.  It  keeps  him  from  stagnation,  it  develops  him 
mentally  and  physically,  stimulates  him  to  invention  and  sustained 
effort ;  in  a  word,  it  creates  in  him  ambition.  Our  whole  social  sys- 
tem, and,  indeed,  many  of  our  laws,  have  been  built  upon  the  recog- 
nition of  conflict  as  a  natural  regulative  force:  to  illustrate  from 
contemporary  politics,  we  insist  upon  industrial  competition  and 
prohibit  monopoly;  the  law  prescribes  war,  not  peace.  For  this  rea- 
son the  social  theories  and  experiments,  which  have  rested  without 
qualification  upon  the  principle  that  all  men  are  equal,  have  failed ; 
equality  before  the  law  is  a  great  and  enduring  achievement  of  our 
ancestors,  but  equality  of  career  is  almost  a  contradiction  in  terms; 
the  right  to  fight  for  such  reward  as  his  individual  equipment  and  in- 
dustry may  earn,  to  take  his  chance  of  success  or  failure,  is  as  much 
as  a  virile  man  ever  asks, .but  he  does  ask  that.  It  was  the  assertion 
of  this  right  which  precipitated  the  conflict^  now  a  century  old,  in 
.which  our  American  railroad  industry  is  still  engaged,  but  under 
conditions  almost  reversed.  It  is  the  conflict  between  Capital  and 
Labor  which  has  been  waged  since  the  organization  of  modern  in- 
dustrial society,  and  it  represents  the  most  important  phase  of  the 
railroad  question  today,  more  important  than  what  freight  rates  are 
or  are  to  be,  more  important  than  car  supply  and  the  volume  of 
traffic,  more  important  than  the  relation  of  public  opinion  to  the 
railroads.  It  is  the  vital  question,  and  on  the  proper  solution  of  it, 
which  means  the  substitution  for  the  existing  civil  strife  of  some 
other  and  more  economic  conflict  with  a  common  competitor,  depends 
the  future  of  the  American  railway  industry. 

At  the  beginning  of  the  Nineteenth  Century  capital  was  all- 
powerful  and  soon  abused  its  power.  It  controlled  the  machinery  of 
government  and  it  made  public  opinion.  The  economic  literature  of 
the  day  was  all  capitalistic  and  some  of  its  conclusions  are  as  re- 
volting to  uSj  who  are  engaged  in  industry  today,  as  are  the  other 
extremes  of  the  contemporary  Syndicalists.  The  pendulum  soon 
began  to  swing.  To  secure  a  just  recognition  of  its  rights,  both  as 
human  beings  and  with  respect  to  its  contribution  to  the  success  of 
industry.  Labor  found  and  put  to  its  service  the  principle  of  collective 
bargaining.  It  was  an  eflfective  weapon.  With  its  aid  the  labor 
unions  grew  in  power  until  the  conflict  became  an  equal  one.  Occa- 
sionally war  was  necessary,  but  usually  diplomacy  was  sufficient 
as  the  parties  grew  to  respect  one  another,  and  at  that  moment  sub- 
stantial justice  was  probably  done  by  both.  The  next  stage  marked 
a  change  in  the  balance  of  power,  and  today  the  condition  of  the  rail- 
way industry  in  the  United  States  illustrates  a  tendency  to  abuse 


25^^56 


of  power  by  that  one  of  the -parties  who  was  at  first  abused.  He  who 
was  despised  now  despises.  We  are  living  in  the  midst  of  a  process 
of  steadily  increasing  transfer  of  the  fruits  of  the  railway  industry 
from  capital,  Avhich  once  enjo3^ed  them,  to  labor:  not  to  all  labor 
engaged  in  the  industry,  it  may  be  noted,  but  to  certain  powerful 
classes  of  labor.  The  honours  of  war  may  be  said  to  be  even :  there 
are  those  on  both  sides  who  have  suffered,  and  both  parties  are  today 
faced  by  a  common  risk.  It  behooves  both  Capital  and  Labor,  there- 
fore, to  find  a  new  vent  for  the  human  appetite  for  conflict  and  to 
join  forces  for  their  common  good. 

II.    The  Evil  Consequences  to  Industry  of  the  Existing  Conflict. 

Perhaps  the  greatest  evil  of  this  conflict  is  visited  actually  or 
potentially  upon  the  public,  which  is  entitled  to  a  uniform  and  un- 
interrupted conduct  of  the  transportation  facilities  on  which  it  de- 
pends more  and  more  every  year,  but  it  is  not  proposed  to  go  into 
that  important  phase  of  the  question  here.  Our  subject  is  the  effect 
upon  the  parties  to  the  conflict. 

There  are  three  recognizable  consequences  of  this  conflict  which 
have  had  an  evil  effect  upon  the  capital  invested  in  railroads  and  as 
many  of  injurious  effect  upon  labor.    Let  us  examine  them  in  turn. 

Not  the  least  element  of  the  growing  strength  of  labor  in  this 
conflict,  is  that  labor  is  today  popular,  in  the  sense  in  which  control 
of  political  policy  is  accomplished  in  a  progressive  democracy  by 
what  is  popular.  It  represents  votes  and  is  heeded  by  legislatures. 
Its  attitude  of  conflict  with  the  management  of  the  railways,  which 
represent  the  capital  invested  in  them,  was  not  the  cause  of  the 
assumption  of  the  power  of  regulation  of  the  railways  by  government ; 
the  managers  themselves  are  responsible  for  that,  but,  since  regula- 
tion became  an  accomplished  fact,  the  activity  of  labor  in  the  legis- 
lature has  been  the  inspiration  of  many  of  the  laws  of  unnecessary 
and  oppressive  regulation  which  have  been  enacted.  I  am  myself  an 
advocate  of  regulation  of  the  railways  by  government,  but- 1  am  un- 
able to  blink  the  fact  that  what  we  have  had  has  not  always  been 
what  we  may  fairly  expect  to  have,  the  regulation  which  considers 
all  alike.  In  the  period  of  adjustment  of  the  last  few  years  the 
experience  of  every  railway  manager  has  been  that  many  of  the 
measures  of  regulation  of  railways  have  been  futile  and  merely 
wasteful  of  money  sorely  needed  for  improvement  of  facilities  which 
have  in  consequence  been  postponed.  Many  of  these  measures 
have  originated  in  mere  opportunism  of  the  politician,  who,  seeking 
to  commend  himself  to  his  constituents  by  adroit  insistence  upon 
minor  wrongs,  secures  the  enactment  of  a  general  law  prescribing  an 
invariable  and  expensive  practice  for  the  operation  of  all  railroads^  the 
suggestion  for  which  had  its  origin  in  the  failure  of  a  particular  rail- 
road in  respect  of  its  handling  of  a  particular  shipment ;  but  there  are 
those  also,  and  they  are  not  few,  which  have  been  the  direct  conse- 
quence of  the  conflict  of  Labor  and  Capital.  The  managements  of  the 
railways  ha^^e  not  been  esteemed  by  legislatures  in  recent  years  for 
historical  reasons  which  are  not  creditable  to  either  of  them,  and  it 
has  been  as  easy  for  organized  labor  as  for  the  ambitious  politician 
to  secure  the  passage  of  a  law  to  make  a  railroad  wince. 


But  more  serious  than  this  is  the  effect  upon  the  railroads  of 
the  steady  demands  of  labor  for  fixed  and  invariable  increases  of 
wages.  1  here  is  no  railway  manager  today,  I  venture  to  assert,  who 
does  not  want  all  his  employees  to  be  well  paid,  to  share  in  pros- 
perity when  prosperity  exists,  and  to  be  rewarded  by  promotion  for 
efficient  and  loyal  services.  If  he  is  not  able  to  give  this  feeling  ex- 
pression in  all  deserving  cases  it  is  because  his  constanL^cost  for 
the  numerically  most  important  classes  of  labor  has  increased  in 
greater  proportion  than  the  increases  of  revenue  out  of  which  that 
cost  must  come.  The  margin  necessary  for  the  successful  administra- 
tion of  any  industry  has  been  thereby  progressively  narrowed,  until 
the  point  of  danger  to  credit  even  of  the  most  prosperous  roads  is  now 
distinctly  visible,  as  any  one  can  testify  who  has  railroad  securities  for 
sale  which  he  bought  ten  years  ago.  This  is  a  situation  vvhich  would  be 
difficult  in  an  industry  which  could  stand  still,  but  in  an  industry  of 
which  the  life  is  growth,  it  discourages  those  who  are  invited  to  risk 
the  new  capital  necessary  to,  make  even  the  improvements  which,  by  in- 
creasing efficiency,  will  reduce  expenses  and  so  widen  the  margin  again : 
much  less  will  the  funds  be  forthcoming  for  the  improvements  de- 
manded by  *  the  public  for  comfort  and  convenience.  In  the  end  the 
tendency  jeopards  the  very  capital  already  invested. 

Another  consequence  of  the  conflict  in  its  effect  upon  Capital  is 
perhaps  irrevocably  accomplished  already.  It  is  the  change  which 
uncertainty  of  income  has  had  upon  the  point  of  view  of  investors. 
Time  w^as  when  railroad  stocks  v^ere  a  favorite  form  of  investment, 
not  only  because  they  promised  substantial  profit  by  increment  of 
value,  hut  because  they  spelled  stability  of  income.  Today  railroad 
stocks  are  not  in  favor,  and  whenever  money  is  now  invested  in  rail- 
roads (except  in  extraordinary  cases,  each  of  which  has  its  historical 
explanation),  the  form  of  investment  is  the  bond.  In  other  words, 
the  investor  is  no  longer  a  partner  in  the  business,  or,  to  use  the  good 
old  Elizabethan  word,  an  adventurer;  but  has  become  a  money  lender. 
He  prefers  the  right  to  foreclose  a  mortgage  to  an  uncertain  chance 
of  a  profit  secured  by  good  management  and  efficient  operation.  The 
capital  already  invested  in  the  original  construction  of  a  railway 
suffers  the  consequence  of  this  change  of  investing  opinion,  for  it 
must  now  stand  as  the  margin  of  the  new  investor  and  must  risk 
being  wiped  out  for  his  benefit  and  security.  Whenever,  as  has  hap- 
pened in  recent  years,  a  railroad  is  faced  by  unconcerned  and  unyield- 
ing demands  of  labor  at  a  time  when  it  is  unable  both  to  respond 
to  them  and  to  maintain  its  credit,  this  risk  is  imminent.  It  is  a 
consequence  of  war. 

As  it  concerns  labor,  the  conflict  is  not  less  dangerous  in  its  con- 
sequences. We  hear  much  today  of  the  increased  cost  of  living.  It 
is  urged  as  a  ground  for  advancing  wages,  even  w^hen  the  inability  of 
the  industry  to  do  so  and  continue  to  prosper  is  apparent.  The  argu- 
ment is  that  those  who  produce  what  the  industry  markets  are  en- 
titled to  the  first  consideration  in  the  provision  of  the  necessaries  of 
life,  and  where  that  argument  is  supported  by  facts  it  is  most  per- 
suasive. It  is  not,  however,  as  sound  an  argument  in  the  railway 
industry  today  as  it  was  some  years  ago.     While  the  cost  of  certain 


necessaries  of  life  has  indubitably  increased,  the  scale  of  living  of  the 
railway  employee  has  increased  in  greater  ratio,  and  not  the  least 
factor  in  this  has  been  the  increases  in  railway  wages.  This  is  the 
vicious  circle  of  prosperity.  I  read  the  other  day  an  old  book,  Rob- 
ert Wallace's  "Dissertation  on  the  Numbers  of  Mankind,"  published 
in  1753,  before  the  days  of  political  economy,  and  there  came  upon  a 
suggestive  comment  on  this  subject: 

"Operose  manufactures  of  linen,  wool  and  silk,  toys  and 
curiosities  of  wood,  metals  or  earth,  elegant  furniture,  paintings, 
statues,  and  all  the  refinements  of  an  opulent  trading  nation, 
tend,"  he  says,  "to  multiply  men's  wants,  make  the  most  neces- 
sary and  substantial  things  dearer  and  in  general  increase  the 
expences  of  living." 

This  is  an  Eighteenth  Century  expression  of  a  thought  which  an 
American  of  our  time,  who  represents  in  his  own  life  the  success  of 
individual  initiative,  industry  and  economy,  has  well  phrased  in  the 
notable  epigram  that  "It  is  not  the  high  cost  of  living  from  which  we 
suffer  but  the  cost  of  high  living."  There  is  many  an  American  rail- 
way employee  w,ho,  if  he  searches  his  heart,  will  admit  that  the  large 
increases  in  wages  which  have  been  secured  for  him  in  recent  years 
have  brought  him  very  little  real  comfort.  I  was  talking  the  other 
day  with  a  locomotive  engineer  who  Was  thirty-five  years  old  and 
has  drawn  handsome  pay  for  most  of  his  industrial  life.  He 
told  me  that  his  father,  who  had  been  a  runner  on  the  same  road, 
had  saved  and  left  behind  him  $6,000,  living  meanwhile  a  s^lf- 
respecting  life  on  very  much  less  wages  than  his  son  now  gets.  "Not 
only  have  I  been  unable  to  save  anything,"  said  the  son  to  me,  "but 
I  have  spent  some  of  the  old  man's  savings." 

"What  did  you  do  with  your  last  increase  in  pay?"  I  asked. 
"Well,  my  wife  said  that  the  neighbors  thought  she  should  have 
a  silk  dress,  and  the  girls  wanted  a  piano,  and  so  it  went ;  in  the  end 
I  did  not  find  myself  any  better  off  than  I  was  before." 

This  means,  if  it  means  anything,  that  the  present  position  of 
labor  in  its  conflict  with  capital  is  deemed  to  justify  the  expectation 
of  continued  increases  in  pay  without  regard  to  industrial  conditions, 
an  assurance  which  breeds  habits  of  extravagance  which  are  harmful 
to  the  individual.  In  other  words,  the  increased  pay  is  a  factor  in 
creating  the  high  cost  of  living. 

As  the  conflict  is  now  waged,  the  lion's  share  goes  to  the  most 
powerful  organization,  and  the  weak  among  the  employees  alone 
suffer.  It  is  an  indisputable  fact  that  some  classes  of  railway  em- 
ployees are  now  highly  paid,  both  actually  and  relatively,  and  that 
other  classes  are  not  on  the  same  basis  in  proportion  to  the  value  of 
their  services.  This  is  an  inequality  in  the  same  industry  which  one 
can  understand  is  intolerable  to  a  spirited  man,  and  indeed  produces 
some  of  the  worst  consequences  of  the  present  system,  both  upon 
the  employer  and  employee,  but  chiefly  upon  the  latter. 

Finally,  the  present  system  which  required  in  the  beginning  a 
well  disciplined  and  cohesive  organization  for  self  protection,  now 
results  sometimes  in  stifling  the  ambition  of  the  individual  by  an 
assurance  of  drab   unformity  of  treatment.      It  is   not   necessary   to 

6 


press  the  point.  The  warmest  advocates  of  conservatively  managed 
labor  unions,  and  I  am  proud  to  include  myself  in  the  number,  recog- 
nize the  danger  and  the  risk  of  this  necessity  of  the  system. 

What  then  of  the  future,  if  the  present  conflict  continues? 

For  the  management  of  industry  the  conflict  has  been  -a  stimulus 
to  greater  efficiency  and  the  economical  investment  of  nev^  capital. 
As  the  wages  of  labor  increased,  an  attempt  to  offset  the  increased 
expense  by  economy  in  operation  has  resulted,  and  vast  sums  have 
been  spent,  for  example,  in  reducing  grades  and  increasing  power, 
to  secure  greater  unit  train  loads,  but  the  limit  to  this  kind  of  econ- 
omy is  in  sight,  if  it  has  not  been  reached.  The  candid  fact  is  that, 
although  other  branches  of  industry  are  at  this  moment  enjoying 
great  prosperity,  the  railroads,  doing  the  largest  business  in  their 
history  and  passing  through  their  treasuries  the  largest  revenues 
they  have  ever  realized,  are  in  a  more  precarious  condition  than  ever 
they  have  been,  such  is  the  burden  of  their  expenses.  It  is  abso- 
lutely necessary  to  the  railroads  that  something  shall  be  done  to 
relieve  the  present  tense  situation  and  enable  them  to  face  the  future 
with  confidence,  and  I  believe  that  the  way  to  accomplish  this  is  to 
settle  the  conflict  of  Labor  and  Capital  in  the  railway  industry  on  an 
enduring  basis.     Other  remedies  are  mere  salves  on  that  sore. 

For  labor  also  the  future  is  not  assured  under  existing  condi- 
tions. Already  there  have  been  expressions  of  discontent  on  the  part 
of  other  classes  of  the  community  with  what  they  call  the  preferred 
position  of  railroad  labor.  The  most  industrious  and  successful 
farmers  and  storekeepers  in  the  country  along  the  line  seldom  make 
as  much  net  money  in  the  year  as  do  the  railway  employees  stationed 
at  those  towns,  and  nothing  like  as  much  as  those  they  see  going  by 
on  the  trains.  They  are,  however,  a  large  numerical  majority  of 
those  who  pay  freight  charges,  and  they  now  complain  against  the 
freight  rates  fergely  because  they  think  these  rates  might  be  less  if 
such  relatively  high  wages  were  not  paid  to  certain  classes  of  rail- 
road employees.  If  that  class  of  the  community  speaks  it  is  likely 
to  be  heard  in  the  legislatures  more  sympathetically  than  the  rail- 
road managements  are  heard.  All  it  lacks  at  the  moment  is  organiza- 
tion and  this  it  can  learn  from  the -successful  experience  of  labor. 

This  brings  us  to  the  next  point. 

Whenever  any  class  of  society  becomes  so  powerful  as  in  the 
abuse  of  its  power  to  afifect  injuriously  the  lives,  liberty  or  the  pur- 
suit of  happiness  of  or  by  any  other  considerable  class  or  classes 
of  society,  the  consequence,  under  the  existing  regime,  is  for  govern- 
ment to  lay  the  heavy  hand  of  Regulating  Authority  upon  it.  This 
may  happen  sooner  or  later,  but  it  is  inevitable.  Eighteen  months 
ago,  in  a  public  address,  reasoning  from  the  same  premises,  I  ventured 
to  predict  that  the  public  press  could  not  escape  such  legislation; 
and  we  find  today  an  act  of  Congress  regulating  newspapers  on  the 
statute  books.     It  is  not  impossible  that  organized  labor  may  here- 


after  be  faced  with  a  strong  and  sustained  public  control  of  its 
activities.  It  would  be  the  logic  of  the  last  phase  of  the  present  con- 
flict. 

III.  The  Remedy:  Industrial  Co-operation. 

'■  ' '  y  r  ;""  ■• ' 

-  =  It  is  interesting,  and  perhaps  instructive^  to  think  out  these 
things,  but  it  serves  little  purpose  unless  it  leads  to  the  suggestion  of 
a  remedy.  We  cannot  stand  still,  for  "stand  pat"  policies  are  not 
popular  at  the  moment  and  only  serve  to  prolong  the  conflict.  We 
cannot  revert  to  the  former  conditions :  the  old  arguments  which  con- 
vinced men  a  generation  ago  may  still  be  listened  to  respectfully,  but 
.they  are  no  longer  heeded.  We- must  progress. 
:  The  most  tragic  intellectual  life  of  the  last  generation  was  that 
of'the  "English  philosopher  Herbert  Spencer.  About  the  middle  of 
the  Nineteenth  Century  he  began  the  compilation  of  a  synthetic  sys- 
tem :of  philosophy  based  upon  the  opinions  of  that  time,  and,  with  ex- 
traordinary persistence,  learning  and  intellectual  vigor,  he  labored  on, 
despite  physical  handicaps,  until  he  completed  his  self-appointed  task 
in  1896.  It  was  an  achievement  which^  in  a  previous  century,  might 
have  had  enduring  effect  upon  the  opinions  of  mankind,  but  while  he 
was  "writing  the  world  was  moving  with  an  increasing  velocity,  and 
the  opinions  which  actuated  men's  political  and  social  life  in  1896 
were  utterly  different  from  those  of  1850.  His  work  of  a  life  time  was 
out  of  date  before  it  was  complete,  and  the  tragedy  is  that  he  saw 
this.  Yet  he  had  the  vision  of  a  seer  into  the  future.  His  last  word 
was  a  sturdy  maintenance  of  his  belief  that  in  1850  there  was  reached 
in  England  "a  degree  of  individual  freedom  greater  than  ever  before 
existed  since  nations  began  to  be  formed,"  and  that  this  was  the 
highest  state  to  which  man  could  attain,  but  he  had  observed  the 
reaction  against  too  much  individual  liberty  and  the  abuses  which 
it  bred,  and  marked  the  growing  tale  of  statutes  by  which  the  gov- 
ernment was  given  authority  to  interfere  with  the  daily  life  of  the 
citizen ;  in  other  words,  he  foresaw  the  growth  of  Regulation  which 
is  now  a  rooted  policy  of  statesmanship,  and  he  saw  that  this  principle 
must  continue  to  expand  until  the  government  controlled  and  oper- 
ated all  the  industries  in  which  the  individual  citizen  is  employed : 
the  only  alternative  was  a  compromise,  on  which  the  conflicting 
forces  of  society.  Capital  and  Labor,  might  provide  for  the  continu- 
ance of  private  initiative  in  industrial  opportunity.  Dreading  social- 
ism, Herbert  Spencer  found  this  refuge  in  Industrial  Co-operation. 

This  economic  principle  has  found  many  expressions.  Under  it 
Labor  and  CapitaLhave  united  in  the  ownership  of  a  business  and 
have  failed.  Under  it  labor  has  attempted  to  dispense  with  invested 
capital  and  do  business  on  the  aggregate  credit  of  a  number  of  in- 
dividuals :  in  what  we  call  merchandizing,  and  the  economists  call 
distribution,  as  in  money  lending,  success  has  been  accomplished 
through  co-operation,  but  in  the  co-operation  of  production,  such  as 
manufacturing,  there  has  been  failure  for  lack  of  the  capital  neces- 
sary to  carry  the  business  over  times  of  stress.  Capital  itself,  rep- 
resented by  conscientious  and  enlightened  men,  has  from  time  to  time 

8 


sought  to  apply  the  principle  oPcb-opciatiaii' '^6^  irtdtistry  in  the  form 
of  profit  sharing;  here  again  there  has  been  little  real  success  in 
accomplishing  the  prime  object,  which  was  an  identification  of  inter- 
est between  Capital  and  Labor,  because  even^  the'  best  laid  plans  of 
profit  sharing  have  been  regarded  as  a  sort  of  tea  table  distribution 
of  cake  among  men  who  work  for  bread.  The  dole  is^often  accepted 
with  a  sneer.  :v'ro' 

I  do  not  now  propose  any  of, these  forms  of  co-operation. for  the 
railway  industry,  but  one  which  seeks  their  object  and  attempts  ton 
avoid  the  causes  of  their  failure.  At  the  moment,  that  .industry  is  in 
a  precarious  condition,  everyone  engaged  in  it  has  his  stake  at  risk. 
In  order  to  identify  and  co-ordinate  all  the  interests  involve^,  and  to 
secure  the  success  which  is  not  only  possible  but  almost  inevitable 
if  that  result  is  attained,  all  must  share  in  the  results  of  the  business 
according  to  the  fluctuation  of  the  industrial  barometer :  the  spur 
must  be  the  expectation  of  loss  sharing  as  well  as  profit  sharing. 

Specifically,  I  propose,  therefore,  that  a  railway  wage  schedule 
shall  be  prepared  as  follows: 

Calculate  on  experience  what  has  been  the  percentage  of  the  total 
pay  roll  of  all  classes  of  employees  to  the  operating  revenue  in  a  given 
year  or  average  series  of  years,  and  apply  this  percentage  to  current 
operating  revenues  to  fix  thereby  the  appropriation  for  pay  of  em- 
ployees. The  total  appropriation,  so  made,  would  then  be  distributed 
among  the  several  classes  of  employees  in  the  percentages  of  their 
participation  in  the  pay  roll  which  was  taken  as  the  standard,  and 
the  individual  would  share  in  the  appropriation  for  his  class  accord- 
ing to  his  services  measured  by  agreed  units. 

Under  this  meter  wages  would  increase  automatically  as  reve- 
nues increased,  but  would  decrease  automatically  as  revenues  de- 
creased. The  prosperity  of  the  individual  would  be  that  of  the  road. 
Capital,  controlling  management,  would  alone  be  interested  in  ex- 
penses, as  now:  Labor's  interest  would  be  in  increasing  revenue, 
or  what  has  been  heretofore  called  gross  earnings. 

While  there  are  many  details  which  would  have  to  be  worked 
out  to  make  this  suggestion  practically  effective,  the  beneficial  conse- 
quences of  the  acceptance  of  its  principle  might  be  far  reaching. 

The  railroad  industry  would  be  a  united  industry:  there  would 
be  a  common  interest  between  employer  and  employee.  The  intelli- 
gence and  energy  which  is  now  devoted  to  the  effort,  on  the  one 
hand,  to  get  wages  increased,  and,  on  the  other,  to  resist  increases 
might  be  expected  to  be  applied  to  promoting  the  industry  itself. 
The  result  would  soon  be  reflected,  not  only  in  the  income  account, 
but  in  the  statute  book.  If  rates  were  too  low  to  yield  a  fair  wage 
to  all,  as  well  as  a  fair  return  to  capital,  there  would  be  a  united 
demand   for   their   readjustment   which   would   have   the   backing  of 

9 


votes  as  well  as  arguinent.  '  The  human  lust  for  conflict  would  find 
its  expression  as  between  railroad  and  railroad :  officer  and  em- 
ployee would  have  a  common  loyalty,  and  the  healthiest  kind  of 
competition  would  be  promoted,  that  of  efficient  service.  The  in- 
dividual would  control  his  household  expenses  and  would  follow  the 
expansion  and  depression  of  trade  with  his  own  economies :  he  woulci 
indeed  be  in  business,  a  true  unit  in  the  current  industrial  life  of  the 
nation,  rather  than  the  beneficiary  of  the  plunder  of  a  successful  war. 

This  is  the  purpose  of  Industrial  Co-operation. 

Is  it  not  worth  considering  ways  and  means  to  bring  it  about? 


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APR     2  193'' 


;.R    3   1934 


SEP    21  1934 


LD  2l-100m-7,'33 


f         GAYLOHD  BROS. 

MAKERS 

SYRACUSE,  -  MY. 

PAT.  JAN.  21;   ISOS 


257156 


